PACCAR has reported a three percent increase in first quarter sales. Revenues from product sales and financial services were US$3.98 billion, three percent higher than the $3.85 billion reported for the comparable period in 2006.
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Mark C. Pigott, chairman and chief executive officer said that “Paccar’s balanced global diversification has benefited from a strengthened Eurozone economy and steady GDP growth in North America, in combination with the growth of aftermarket parts and financial services. Paccar’s business outside the US, which is over 50 percent of the company’s total revenues, is making a major contribution to the excellent performance, and is providing a counter-cyclical balance to slower business in North America.
Paccar has reduced production levels in its U.S. and Canadian facilities to reflect lower industry demand, which has been impacted by higher-cost 2007 emission engines. “The lower demand and proactive build rate adjustments will have a dampening effect on company financial results until the industry absorbs new vehicles purchased in 2006,” said Pigott.
Paccar announced record first quarter net income of $365.6 million and an after-tax return on revenues of 9.2%.
Paccar is forecasting European truck demand to continue to be strong with demand for trucks over 15 tonnes ranging between 265,000 and 280,000 units during the year. DAF is increasing its production rates accordingly. In 2006, DAF increased its full-year market share to a record 14.5 percent. DAF’s long-term goal is to achieve over 20 percent market share.
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By GlobalDataThe U.S. and Canadian truck markets have declined, as anticipated, due to the industry ‘prebuy’ in the second half of 2006. Tom Plimpton, president of Paccar said the company expects industry Class 8 retail sales to be 190,000 to 220,000 for 2007.
In January 2007, PACCAR announced plans to build a $400 million engine manufacturing and assembly facility in the Southeast United States. Construction of the 400,000-square-foot facility will begin in mid-2007 and is due to be completed in 2009. This investment complements the company’s state-of-the-art engine factory in the Netherlands and will enable the company to manufacture 12.9L and 9.2L PACCAR engines for use in Kenworth, Peterbilt and DAF vehicles.
Other major developments in the quarter include the opening of a new 260,000-square-foot parts distribution center (PDC) on a 33-acre site in Oklahoma City this month. In addition, construction will soon commence on a new PDC in Budapest, Hungary, which will support DAF Truck’s ongoing expansion into Central and Eastern Europe.
DAF will complete construction of a 76,000-square-foot engine test and research facility in Eindhoven in June 2007. “The twenty test cells in the development center will be the most technologically advanced in the world and will be instrumental in the design of new global Paccar engines,” said Aad Goudriaan, DAF Trucks president.
In Asia Paccar opened a new office in Shanghai, China, in April. Tom Lundahl, vice president, purchasing said; “The rapid development of the highway network in China has begun generating demand for high-quality, reliable commercial vehicles.”
